Israel India | Business Guide | 2017

Legal Aspects > General Content > 023 Make (it) in India. Opportunities and New Methods of Collaboration ‏ Understanding the rules of the "Make in India" initiative and the new Indian vision serves to pave a path for the materialization of the Indian economy's potential ‏ Benjamin Grossman, Adv. ‏ The author is a Partner and Head of the Indian Legal Practice at Amit, Pollak, Matalon & Co. ‏ O n September 25, 2014 Indian PM Mr. Narendra Modi announced the "Make In India" initiative; intended to enhance and formulate the next stage of India's role as a leading player in the R&D and production field within the global economy. "Make in India" emerged alongside other programs such as "Digital India" and "Start Up India" which together, are directing India to its destiny as a global economy in line with the US and China. (For details read: http://www.makeinindia. com/home, http://www.startupindia.gov.in/, http://www.digitalindia.gov.in/ ) ‏ In a nutshell, the provisions of the "Make in India" program, along with other programs, enhance and encourage the establishment and development of technologies in India and their implementation into production by Indian companies. This is expected to be achieved through incentives and ease of regulations (such as ease of restrictions on foreign holdings and investments), establishment of facilities such as production corridors, infrastructures, training programs etc., and on the other hand, benefits and preferences for production and procurement from Indian companies. For example, proceeds generated from Indian- based IP may be exempted from taxes for up to 3 years. ‏ There is no doubt that the implications of the above will be a game changer in the relations of foreign players with the Indian market. Like any major change, it creates opportunities as well as concerns. ‏ Notwithstanding, it also creates a new, non- zero sumgame.Learning and understanding the rules of this new situation as well as the new Indianmindset and vision serve to pave a path for the materialization of the Indian economy’s potential in this new exciting era. ‏ Relationships are expected to be based on transparent and open- minded collaboration between foreign players and their Indian counterparts. This includes transfer of know-how and production capabilities, relinquishing (to some extent) control of equity and IP and moving from ownership and control to licensing of background IP and joint development by JV's. The desired change can be achieved by addressing two main challenges: cultural and legal. ‏ As regards the legal aspects,the new age of collaboration shall be based on: ‏ • Establishment of Indian legal entities, in a manner which complies with updated regulations (such as FDI, FEMA etc.) absorbing external technologies, knowhow, IP etc.; ‏ • Establishment of JV's by foreign and Indian players; ‏ • Engaging in Transfer of Technology (ToT) and Technological Collaboration Agreements (TCA); ‏ • Granting IP licensing for foreign IP to the Indian entities; the licensed IP shall be a background IP serving as a base for advanced IP developed in India by Indian entities in accordance with the particular requirement of the Indian market (price, standardization, logistics etc.); ‏ • M&A of foreign companies by Indian players – which, to some extent already exists, mainly by the 1st tier players. This, however, shall be increased by the inclusion and participation of more players including 2nd tier players; ‏ • Implementation of the above practices will take into account the particular cultural and legal sensitivities and constraints of both parties; with emphasis being focused on those pertaining to the Indian side. ‏ The cultural challenge shall be based on waiving presumptions and prejudices regarding the goals and capabilities of the other party and adopting transparent, equal and respectful attitudes toward the other party.